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Segment Information | 9 Months Ended
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Sep. 30, 2025
Segment Reporting [Abstract] |
Segment Information | Segment Information Operating segments represent components of an enterprise for which separate financial information is available that is regularly reviewed by the CODM in determining how to allocate resources and assess performance. The Company’s operating and reportable segments consist of ASC and IMS. All other operations, which consists primarily of DRS corporate headquarters and certain non-operating subsidiaries of the Company, are grouped in Corporate & Eliminations. Effective for the fourth quarter of 2024, the CODM primarily uses operating earnings to manage the Company and allocate resources. Operating earnings is used to facilitate a comparison of the ordinary, ongoing and customary course of our operations on a consistent basis from period to period and provide an additional understanding of factors and trends affecting our business segments. Prior year information was revised to reflect operating earnings as the segment profit measure. Certain information related to our segments for the periods ended September 30, 2025 and 2024 is presented in the following tables. Consistent accounting policies have been applied by all segments within the Company, within all reporting periods. Intersegment sales are generally transferred at cost to the buying segment, and the sourcing segment does not recognize a profit. Such intercompany operating income is eliminated in consolidation, so that the Company’s total revenues and operating earnings reflect only those transactions with external customers. Revenues, expenses, and operating earnings by segment and the reconciliation to earnings before taxes for the periods ended September 30, 2025 and 2024 consists of the following:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(Dollars in millions) | 2025 |  | 2024 |  | 2025 |  | 2024
Revenues |  |  |  |  |  |  |
ASC | $ | 580 |  |  | $ | 533 |  |  | $ | 1,633 |  |  | $ | 1,458 |
IMS | 383 |  |  | 285 |  |  | 964 |  |  | 812 |
Corporate & Eliminations | (3) |  |  | (6) |  |  | (9) |  |  | (17) |
Total revenues | $ | 960 |  |  | $ | 812 |  |  | $ | 2,588 |  |  | $ | 2,253 |
Cost of revenues |  |  |  |  |  |  |
ASC | $ | 437 |  |  | $ | 411 |  |  | $ | 1,237 |  |  | $ | 1,111 |
IMS | 304 |  |  | 228 |  |  | 760 |  |  | 658 |
Corporate & Eliminations | (3) |  |  | (6) |  |  | (9) |  |  | (17) |
Total cost of revenues | $ | 738 |  |  | $ | 633 |  |  | $ | 1,988 |  |  | $ | 1,752 |
General and administrative |  |  |  |  |  |  |
ASC | $ | 63 |  |  | $ | 52 |  |  | $ | 196 |  |  | $ | 173 |
IMS | 24 |  |  | 22 |  |  | 71 |  |  | 64 |
Corporate & Eliminations | — |  |  | 1 |  |  | — |  |  | 5 |
Total general and administrative | $ | 87 |  |  | $ | 75 |  |  | $ | 267 |  |  | $ | 242 |
Company-funded research and development |  |  |  |  |  |  |
ASC | $ | 29 |  |  | $ | 19 |  |  | $ | 76 |  |  | $ | 51 |
IMS | 7 |  |  | 4 |  |  | 18 |  |  | 13 |
Corporate & Eliminations | — |  |  | — |  |  | — |  |  | — |
Total company-funded research and development | $ | 36 |  |  | $ | 23 |  |  | $ | 94 |  |  | $ | 64 |
Amortization of intangibles |  |  |  |  |  |  |
ASC | $ | 5 |  |  | $ | 6 |  |  | $ | 16 |  |  | $ | 17 |
IMS | — |  |  | — |  |  | — |  |  | — |
Corporate & Eliminations | — |  |  | — |  |  | — |  |  | — |
Total amortization of intangibles | $ | 5 |  |  | $ | 6 |  |  | $ | 16 |  |  | $ | 17 |
Other segment items |  |  |  |  |  |  |
ASC | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 5 |
IMS | — |  |  | — |  |  | — |  |  | — |
Corporate & Eliminations | — |  |  | — |  |  | — |  |  | — |
Total other segment items(1) | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 5 |
Operating earnings |  |  |  |  |  |  |
ASC | $ | 45 |  |  | $ | 45 |  |  | $ | 107 |  |  | $ | 101 |
IMS | 48 |  |  | 31 |  |  | 115 |  |  | 77 |
Corporate & Eliminations | — |  |  | (1) |  |  | — |  |  | (5) |
Total operating earnings | $ | 93 |  |  | $ | 75 |  |  | $ | 222 |  |  | $ | 173 |
Interest expense, net | (4) |  |  | (5) |  |  | (7) |  |  | (17) |
Other, net | (2) |  |  | (1) |  |  | (3) |  |  | (3) |
Earnings before taxes | $ | 87 |  |  | $ | 69 |  |  | $ | 212 |  |  | $ | 153 |
________________ (1)Includes ASC restructuring costs for the periods presented. Total intersegment revenues by segment for the periods ended September 30, 2025 and 2024 consists of the following:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(Dollars in millions) | 2025 |  | 2024 |  | 2025 |  | 2024
ASC | $ | 3 |  |  | $ | 6 |  |  | $ | 9 |  |  | $ | 17 |
IMS | — |  |  | — |  |  | — |  |  | — |
Total intersegment revenues | $ | 3 |  |  | $ | 6 |  |  | $ | 9 |  |  | $ | 17 |
Depreciation by segment for the periods ended September 30, 2025 and 2024 consists of the following:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(Dollars in millions) | 2025 |  | 2024 |  | 2025 |  | 2024
ASC | $ | 12 |  |  | $ | 12 |  |  | $ | 36 |  |  | $ | 36 |
IMS | 6 |  |  | 5 |  |  | 17 |  |  | 15 |
Total depreciation | $ | 18 |  |  | $ | 17 |  |  | $ | 53 |  |  | $ | 51 |
Total assets by segment as of September 30, 2025 and December 31, 2024, consists of the following:
(Dollars in millions) |  |  |  |  | September 30, 2025 |  | December 31, 2024
ASC |  |  |  |  | $ | 2,465 |  |  | $ | 2,249 |
IMS |  |  |  |  | 1,344 |  |  | 1,225 |
Corporate & Eliminations |  |  |  |  | 436 |  |  | 710 |
Total assets |  |  |  |  | $ | 4,245 |  |  | $ | 4,184 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name 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